The JCPOA (Joint Comprehensive Plan of Action) – as the Iran deal is formally known – was signed between Iran, the US, Russia, China, Britain, France, Germany and the EU.

But Trump’s pullout has left international companies doing business in Iran vulnerable to the extraterritoriality of US law, which enables Washington to punish foreign companies operating in Iran if they have business dealings with the US or use dollar transactions.

Europe has long complained about the long arm of US economic jurisdictions, which made it difficult for major European banks and companies to operate in Iran even before the US pullout. Amid uncertainty over Trump’s impending decision, European banks have avoided Iran-related transactions, fearing “the American guillotine” that has severely punished firms evading US sanctions in the past, such as a hefty, almost $9 billion fine slapped on France’s largest bank, BNP Paribas, in 2014 for sanctions evasion.

On Wednesday, those gripes reached a pitch. Slamming the US withdrawal from the Iran deal as “an error”, French Finance Minister Bruno Le Marie complained that it was “not acceptable” for the US to play “economic policeman of the planet”.

Speaking to reporters in Paris a day after the US withdrawal from the JCPOA, an official in the French presidency said European authorities would “do everything” possible “to find a way to protect this multilateral framework”.

Washington has given companies between 90 and 180 days to phase out existing contracts with Iran and banned them from signing any new ones, under threat of sanctions.

‘Limited opportunity’ or ‘big opportunity’

While the multilateral JCPOA seeks to reintroduce Iran into the global economic system in exchange for its nuclear compliance, Trump’s pullout -- and the threat of US sanctions -- has made it difficult for European signatories to provide Iran the carrots envisaged under the deal.

In a phone call with French President Emmanuel Macron Wednesday, Iranian President Hassan Rouhani told the French leader that he believed Europe had “limited opportunity” to preserve the nuclear deal, according to Iranian media.

But Caroline Galacteros, a geopolitics and strategic intelligence expert, believes the US pullout could present the EU with “a big opportunity” to come up with a unified response to a system that has long rankled European powers.

“It’s up to us to decide in the end if we really want to accept this extraterritoriality of US law. That’s the big issue in my opinion. It can be a real shift in the balance of power,” said Galacteros on the FRANCE 24’s Debate show Tuesday. “If Europe sticks to the deal, and the Iranians are cautious and won’t hit back – because that’s what Washington is probably expecting from them – then we have Europe and Iran sticking to the deal, as well as Russia and then China… It all transforms the balance of power.”

Dealing in euros, bypassing US links

Some European governments have already begun implementing measures for European and Iranian firms to bypass US law. In January, France’s state-owned investment bank Bpifrance announced a plan to offer dedicated, euro-denominated export guarantees to Iranian buyers of French goods and services, bypassing any US links.

“We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran,” Bpifrance’s Chief Executive Officer Nicolas Dufourcq told French lawmakers in January. The plan had a pipeline of about €1.5 billion in potential contracts from interested French exporters, said Dufourc.

Italian authorities also worked out a similar deal in early January, when Rome and Tehran agreed on a framework credit agreement to fund investments in Iran worth up to €5 billion via the Italian state-owned holding Invitalia.

“European governments aren’t starting from zero, they have been taking individual steps during the period of uncertainty when Trump’s decision was anticipated,” explained Naysan Rafati, Iran analyst at the Brussels-based International Crisis Group. “What is required now is a more systematic effort at the EU level for a coordinated response.”

Diplomatic negotiations for exemptions

But while these measures could work for small scale Iranian and European businesses, they are unlikely to sway European multinational giants with major US interests and transactions.

The biggest losers are likely to be French aviation giant Airbus, which has booked orders from Iranian airlines for 100 aircraft for a total of $20.8 billion. French oil firm Total, which in association with the Chinese group CNPC has signed an agreement for a $5 billion investment to exploit Iran’s South Pars deposit, is also likely to suffer losses in Iran.

In such cases, Ellie Geranmayeh, a specialist in Iran-European relations at the Brussels-based European Council for International Relations, suggests the Europeans "should try to negotiate exemptions with the US so that they can continue to trade with Iran in strategic sectors such as energy [oil, gas] or aeronautics", she explained.

Another measure available to the EU is the replacement of its so-called 1996 Blocking Statute, which prohibited European companies from complying with US extraterritorial laws. The measure initially concerned European firms doing business in sanctions-hit Iran and Cuba. But as Europe began cooperating with the US on Iran, it only applied to Cuba.

Setting up these structures however takes time, likely more than the 90 to 180 days granted by the US.

Iran would also have to be patient, although Iranian President Hassan Rouhani has said Tehran is willing to give European powers “several weeks” to come up with a solution before he ordered Iran’s Atomic Energy Organisation to resume uranium enrichment “without limit”.

European attempts to negotiate exemptions from the US for strategic sectors such as energy and aeronautics could also flounder if Washington adopted a hardline approach. Under such circumstances, experts say the EU could threaten to impose tariffs on US exports.

Geranmayeh believes the EU threatening to imposing tariffs on US exports would be justified since the US secondary sanctions (on foreign entities) interfere with European foreign policy, of which the JCPOA is an important element.

But few experts believe the EU is likely to risk an all-out trade war with the US. And so as the clocks tick toward more deadlines, European powers will be scrambling to save the landmark 2015 deal.

A transatlantic diplomatic shuffle is likely to start, with European officials attempting to persuade the US “economic policeman” to come up with ways to soften the blow. French Finance Minister Le Marie has said he hoped to meet with US Treasury Secretary Steve Mnuchin later this week. It remains to be seen that the French minister can extract from his US counterpart.